11% as Optimistic Outlook for Russia’s Inflation Rate

Russia’s inflation may constitute lower than 11% if the current trend of the ruble’s strengthening continues – the Russian publication Vedemostireported the country’s deputy finance minister saying.

According to the local news agency TASS, Russia’s deputy finance minister Maksim Oreshkin commented on the subject to the press. He said the inflation rate could be lowered to 4,5% as soon as year 2016. A “temperate” and “stable” growth in income is the necessary prerequisite for the inflation rate in the Russian economy to go down, according to Oreshkin.

“We believe that a 6% nominal growth in incomes is the necessary rate to achieve our targeted 4% inflation rate. If all the other factors play along, the inflation rate in the economy will surely go down and this will happen quite soon,” Russia’s deputy finance minister stated.

“At such pace we might even reach the desired 4% inflation rate by year 2016, to look at the current picture optimistically,” Oreshkin said.

He specified that the optimistic outlook is first and foremost based on the assumption that the wages and incomes in the country increase at a moderate rate.

“Deindexation of the state budget employee wages has been made in order to achieve a temperate growth in incomes. This will already contribute to bringing the inflation rate down this year,” Russia’s deputy finance minister prognoses.

According to WSJ, Russia’s annual consumer price inflation rate accelerated to 16,7% in March, compared to the 15% in January. Food priced were the main driver of the headline inflation figure.